Orange CEO speaks out on potential Bouygues acquisition

Stéphane Richard, the CEO of French telco Orange, has gone public with some initial thoughts on his company’s potential acquisition of rival MNO Bouygues Telecom.

Orange was forced to confirm it was in preliminary discussions with Bouygues last week following a round of leaks and media speculation on the matter, but was keen to dampen expectations of a positive outcome.

The talks come in spite of Orange previously indicating it has little need to consolidate in France and Bouygues Group insisting it’s still quite fond of its telecoms division.

At a press conference in Paris attended by the leading newswires Richard continued to hedge Orange’s position. “We’ve started an in-depth study of a transaction, but I won’t take Orange into a deal that doesn’t fit our essential criteria, it’s a complex operation,” he was quoted by Bloomberg. “The merger must create value for Orange and boost investments in the French telecoms sector,” Reuters quoted.

Any risk assessment must surely start with the likely intervention of regulators, which have previously indicated a desire to have at least four MNOs in France. A move like this would bring the number down to three and make Orange the overwhelming market leader, so it’s hard to see how Orange could be remotely optimistic about regulatory approval if it hadn’t already received some encouraging signals.

Elsewhere Orange continued to pursue growth in Africa with the acquisition of Cellcom Liberia, which is apparently the country’s leading MNO. Citing Liberia’s relatively low mobile penetration rate of 66%, Orange said it thinks Cellcom Liberia has excellent potential for growth.